Donaldson Co. recommending an annual vote on executive compensation.

Donaldson Co. proxy statement came out this week and its board of directors is recommending shareholders vote for an annual say-on-pay vote for executive compensation. That is a change from their recommended vote in 2011 on the topic.

The Bloomington-based company was among the few companies who had a triennial vote on executive compensation.

In a related governance and shareholder engagement move Donaldson will join the growing list of companies who adopted a virtual annual meeting.

Donaldson holds their annual meeting on Nov. 17 at 1:00 pm. Shareholders can attend electronically by visiting www.virtualshareholdermeeting.com/DCI2017.

Donaldson reaches out to its shareholders in a number of ways beyond proxy votes and the annual meeting. "Engagement with shareholders is a priority for us," said Brad Pogalz director of investor relations and corporate communications at Donaldson.

Two provisions of the Dodd Frank act implemented in 2011 gave shareholders a greater voice in executive compensation. The nonbinding say-on-pay vote allows shareholders to vote "for" or "against" the company's executive compensation plan.

The say-on-frequency vote, also nonbinding, lets shareholders choose how often its company has a say-on-pay vote – every one, two or three years. The Dodd Frank Act requires companies to have the say-on-frequency vote at least once every six years

When Bloomington-based Donaldson Co. Inc. held its first say-on-frequency vote in 2011, the board of directors recommended and shareholders approved a vote every three years. At that time, they also reminded shareholders they did not need to wait for the next vote on compensation to share their concerns with the company.

Because of their say-on-frequency vote Donaldson shareholders had voted on executive compensation plan twice, in 2011 and 2014. The approval rates were 96 percent and 91 percent respectively.

According to the latest report by Compensation Advisory Partners, a New York-based executive compensation-consulting firm, among S&P 500 companies in 2011 70 percent recommended an annual vote.

Now it has become best practice to adopt an annual vote on compensation. In 2017 94 percent of S&P 500 companies recommended an annual vote on compensation.

"It's became clear that shareholders want to weigh in more frequently on executive compensation," said Margaret Engel, a founding partner of CAP.

And earlier this year Austin-based Hormel Foods Corp., the only S&P 500 company with a biennial vote, also moved to an annual vote.